The iTunes Store Shows A Hint Of Panic

Apr 15 2014, 6:34am CDT | by

The iTunes Store Shows A Hint Of Panic
Photo Credit: Forbes Business

There’s talk coming from various sections of the music business that Apple’s iTunes Store will soon offer high-resolution tracks for sale, and that the introduction might coincide with the future release of three Led Zeppelin masters. The unconfirmed details have the hi-res tracks in their full 24 bit glory encoded using Apple’s lossless audio coding, and priced a dollar more than the current lossy AAC tracks.

Mastered For iTunes To The Rescue, Maybe

The fact is that Apple has been accepting 24 bit tracks at up to a 96kHz sampling rate for more than a year now in their Mastered for iTunes program (called MFIT within the industry), but the final encode for the iTunes store was still done at the lossy AAC resolution, although they sounded better due to starting with a higher quality master.

Supposedly, the hi-res track launch is in response to the fact that Apple is seriously concerned about how quickly download sales are diminishing, with Nielsen Soundscan’s Q1 report finding that downloads have diminished 13.3% over the same time last year. Apple missed the boat when it launched iTunes Radio, thinking that it was a way to increase download sales instead of realizing that people stream because they don’t want to purchase their music anymore. Now it’s faced with sales falling far faster than anyone ever anticipated as streaming gradually takes over the music delivery space.

But offering hi-res tracks might be only a temporary ace in the hole for iTunes, record labels and artists alike. It doesn’t cost the company extra to offer hi-res tracks, since most are already delivered that way, and it increases the per track revenue. The only problem is that the majority of buyers probably aren’t interested in the higher fidelity in the first place, and would rather pay the least amount of money possible if they choose to make a purchase at all. Then the fact of the matter is that many pop-oriented tracks aren’t recorded that well to begin with, or use distorted samples or loops that probably won’t provide much of a difference in the end for the average listener. Buy one hi-res track that doesn’t seem worth it and you’ll probably never buy another again.

It’s Not Easy Being The Leader

That said, Apple can somewhat ride on the coattails of the hype built around Neil Young’s Pono Music when it launches in the Fall. Pono has been great at getting publicity so far, especially thanks to its highly successful Kickstarter campaign. While that might boost hi-res sales on the iTunes Store for a bit as well, the download boat has already sailed. There’s still some life left in downloads, but with sales quickly diminishing, there’s only one way it’s going from now on, and that’s down.

iTunes Radio isn’t the answer either. While the service initially seemed to take a bite out of Pandora’s market share, that initial excitement has also dissipated. It now looks like another also-ran at the moment.

Apple’s only chance is to introduce a true interactive streaming service, a Spotify-killer so to speak, in order to keep it’s total music market share from drastically falling. It’s also been rumored that Apple is in talks with the major labels in that regard as well, but in the meantime, Spotify grows stronger by the day, and Deezer (Spotify’s biggest European competitor) is on the doorstep as it gets set to launch in North America.

Just launching a me-too service won’t cut it for Apple though. It has to be something exceptional in order to make people switch from their current streaming service of choice. Let’s face it, Apple’s track record hasn’t been so good lately in that regard, but don’t count the company out yet. It’s still the 800 pound gorilla capable of smashing anyone’s digital furniture if it wants to. My bet is that the gorilla will be let out if its cage by the time school returns in September. Then we’ll see if it has 800 pounds of muscle or fat.


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